Interest only Resi mortgages from Private banks?

by Readers Question

14:04 PM, 25th May 2017
About 2 years ago

Interest only Resi mortgages from Private banks?

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Interest only Resi mortgages from Private banks?

Hi all,

Now that interest only Resi mortgages have disappeared from the traditional market place, I have noticed a few private banks are still offering them.

Has anyone had experience of applying for one (good or bad).

We would like to upsize, but with all the interference from the FCA and PRA, the only potentially viable way forward for us now, would be via the private banks – if we can pass their underwriting!!

Many thanks

Chris



Comments

Neil Patterson

14:09 PM, 25th May 2017
About 2 years ago

Hi Chris,

I am sorry I have had no experience since the new MMR rules came into force about affordability testing, but I have asked around for you.

Howard Reuben CeMap CeRER

14:36 PM, 25th May 2017
About 2 years ago

Hi Chris

"Now that interest only Resi mortgages have disappeared from the traditional market place,"

Not sure who told you that, but I have just checked and IO resi mortgages are still very much available from traditional lenders (with a handful of exceptions, granted) but many are definitely still available such as the following selection;

Aldermore
Barclays/Woolwich
Bath BS
Cambridge BS
Clydesdale
Dudley
The Family Building Society
Halifax
Harpenden
Ipswich BS
Kensington
Kent Reliance
Leeds
Mansfield
Marsden
Metro Bank
Monmouthshire
Natwest
Newbury
Pepper
Principality
Santander
Scottish Widows
Skipton
Staffordshire Railway Building Society
Tipton Building Soc
Virgin
Vida

..... and all with varying LTV limits, with LTV max range from 50% to 90% and dependent on other criteria, such as exit / repayment strategy too.

Private client banks are not the only option.

Using someone other than a professional independent Adviser is NOT an option! 😉

Hope that helps.

Cautious Landlord

14:37 PM, 25th May 2017
About 2 years ago

As part of our s24 strategy we had detailed talks with Handelsbanken who offered us terms for the portfolio and our own principle place of residence. The latter was say 30-40%LTV, good rates, overdraft style - about a year ago. We didn't go ahead with that deal as in the end the portfolio structure didn't suit us. However, int only mtge defo available with them then at low LTV.

Neil Patterson

14:54 PM, 25th May 2017
About 2 years ago

Out of interest on the subject i have been told that Coutts only offer capital and repayment mortgages even on BTL.

Janet Carnochan

13:55 PM, 26th May 2017
About 2 years ago

I looked into these not long ago and both Alliance & Leicester and Virgin offer these. Virgin offer for a high loan to value, about 70%.

PaulM

15:30 PM, 26th May 2017
About 2 years ago

Hi,
I bank with Coutts and they definitely do offer Interest only borrowing. For my arrangement, I have a Mortgage Reserve Account (MRA) which is secured against my principle residence at a 70% LTV. I then use this facility to fund my BTL business.

However, firstly you'll need to qualify to be one of their clients and then you'll still get the third, fourth, and fifth degree when going through the MRA application process! They are very flexible and forward thinking but incredibly strict on their rules.

Colin Dartnell

14:03 PM, 27th May 2017
About 2 years ago

I wonder who told you that, it's not true at all there are plenty available.

Mark Alexander

17:23 PM, 27th May 2017
About 2 years ago

Reply to the comment left by "Paul Mullally" at "26/05/2017 - 15:30":

Very interesting Paul.

I too am a Coutts client and have a few BTL's with them at <50% LTV but they told me they only do cap/rep mortgages. Not to worry, they will be repaid fully in less than 5 years. .

PaulM

19:07 PM, 27th May 2017
About 2 years ago

Reply to the comment left by "Mark Alexander" at "27/05/2017 - 17:23":

Mine are not strictly BTL mortgages. I have an MRA facility secured against my UK residential property. I guess you may not be able to this if you're based in Malta as I know they weren't interested in any none UK property as they're too difficult to manage/secure. I will then loan the money to my company via a Directors loan as and when needed.

I paid down all my borrowing a few years back when they announced Section 24. I didn't like the sound of that one 🙂


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